ANC, labour divided over Walmart’s bid

2011-01-23 12:26

Mpho Sibanyoni

Johannesburg - The ANC and its alliance partner the Congress of SA Trade Unions (Cosatu) have different views on multinational retailer Walmart’s bid to take over Massmart Holdings [JSE:MSM] which could hamper future foreign investment into the country.

Earlier this week, shareholders of Massmart, owner of Game, Builders Warehouse and Makro, accepted Walmart’s offer of R16bn for 51% ownership of the local company. The deal is now subject to approval by the competition authorities.

“We support any initiative that will pump foreign direct investment into the country,” said ANC spokesperson Keith Khoza after Massmart’s shareholders gave the deal the nod.

He added: “Whoever makes an investment here is bound by the laws governing South Africa and must comply with the approval framework of the Competition Commission.”

Khoza said the takeover bid should not affect employees of Massmart negatively.

“The bid should not in any way undermine the country’s objective to create sustainable jobs and we would not like to see a situation where permanent employees are turned into temporary workers.”

In contrast, Cosatu said it was totally opposed to the bid. Spokesperson Patrick Craven said the labour federation, representing 1.8 million workers, would call for consumers to boycott Walmart products should the bid succeed.

He said: “Walmart is an anti-union employer and its procurement policies would be to the detriment of local suppliers and the country because the multinational company normally sources products from its already established network of cheapest suppliers.”

Syd Vianello, retail analyst at Nedgroup Securities, said Cosatu was misinformed about Massmart’s procurement policy because the company already bought the vast majority of non-perishable goods from overseas.

He added: “We are worried that Walmart could undercut local retailers and create a virtual monopoly.”

SA as gateway

Last year Massmart announced that it planned to cut 1 500 jobs at its Massdiscounters (Game and DionWired) unit.

Spokesperson Brian Leroni said Massmart and all its chains had no plans for retrenchments and added that 96% of their goods were procured locally.

Economist Dr Azar Jammine said: “Cosatu sees Walmart as a giant American retailer that wants to come here and screw the workers.”

It wasn’t necessarily a bad move by the federation to oppose the bid, he said. “This will put Walmart on its toes when dealing with South African labour matters, rather than taking things for granted.”

Jammine said workers on the continent might have reasons to be concerned about the takeover.

“Walmart only wants to use South Africa as a gateway to Africa and they can afford to comply with our strict labour laws because in other African countries the laws are much more relaxed.”

He also added that there was a chance the behaviour of unions could repel future direct foreign investment. “Psychologically, this will make multinationals aware that there is a strong trade-union movement in the country.”

Thami Bolani, chairperson of the National Consumer Forum, threw his weight behind the bid.

“We hope this deal will encourage more multinationals to set-up shop locally and result in more competition, innovativeness, better service standards,” he said.

“It wouldn’t also hurt if we could see retailers offer cheaper but quality products to consumers, especially considering the country’s high debt levels.”

- City Press

For more business news, go to www.citypress.co.za/Business.

Comments

feppie
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2011-01-23 14:34

No surprises from ANC-leadership.
Look at the Savoi investment to see the vultures scrambling for "their share". They have no shame!
For some time now, the ANC-leadership treats overseas investments as instruments of, straightforward corruption.

clint
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2011-01-23 17:04

How stupid are Cosatu being. WallMart has a better supply chain and have said they will support local - much more than Mr Price do now. They are just being otherwise for the sake of it.

YOYO
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2011-01-23 17:26

The anc and the unions are like chameleons in a smartie box..........confused and confused and confused.The thing that would bother the anc the most is that they cannot get their filthy paws on any cash!!!

Cassandra
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2011-01-23 17:47

Bring it on Walmart - as a consumer I'm all for lower prices. Cosatu can go stuff itself - looking at the disgraceful behaviour of mostly Cosatu members during strike action you won't find any sympathy from the general public.

Nasdaq7
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2011-01-23 19:57

Walmart creates jobs. The unions can't create jobs. The unions have to realise: this a major international transaction that will bring more investment to South Africa. More investment means jobs. The more a country becomes known as an investment destination, the more foreign investment it attracts. The ANC must now choose what is right: give Walmart a chance. This country needs to become courageous. We can't hide in a shell. We need to attract foreign investment and this deal is big news on Bloomberg, the Economist, Reuters, NYT, BBC... this is as big as the World Cup in money terms.

realist
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2011-01-23 20:53

Walmart's biggest supplier is China.They are able to sell items cheaply because of low chinese labour.

james4usa
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2011-01-23 21:15

Wal-Mart saves the ave US family $2700 Pa. The people that work in the stores are shelf stocking idiots and they get healthcare.

retailer
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2011-01-24 05:44

don't be so naive - do any of you realise how many independent retailers are going to go out of business when this happens when wallmart comes in and undercuts every ones prices? it is not the retailer who sets the prices in the stores but the wholesaler who sells the goods on and as wallmart and massmart dont deal with wholesalers the average retailer will dont be able to compete. dont comment on items that you do not have any experience in

Justme
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2011-01-24 06:52

This can only be a plus for SA which will improve the service levels of the local major retailers, most of whom have forgotten that the customer is king. This can also assist in driving the prices down which will be enjoyed by the consumer.

peter
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2011-01-24 08:02

Why doesn't Craven export hiomself with othere self serving union bigwigs, who get paid no matter who is on strike, to Cuba and see if they can recreate the 500,000 jobs that the Govt there has just made redubdant. They are in Cuba a communist country that have just received a R1bn handout fromus so have some cash to play with to employ people in non productive jobs.

MIckey
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2011-01-24 08:10

Love it. Walmart is a great move forward. We need it. Wish we had more foreign input in this country - More educated people running things. Maybe our strikes will not be so destructive in the future.

@Nasdaq7
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2011-01-24 09:08

100% Dude- Yet the ANC is not to keen as it is not as pokatable as the SWC was for the profiteering and coruption groups. This is why Cosato is having a field day at it- coz there is no kick bach for them to keep their traps shuts!

Opposed
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2011-01-24 09:24

Have any of you taken the time to do some background checks on this company and what they stand for. Who are the owners, what CSI do they do in their own country, what people policies do they have. Damn you ignorant sods. You keep thinking like a consumer. NEver mond investment if it has long term damage to our people & our small businesses.
As a start get your hands on this movie.
Walmart - The High Cost of Low Prices

Nasdaq7
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2011-01-24 18:15

Opposed So you are stating: because Walmart can produce it cheaper and better than anyone else, keep them out. Imagine we said the same about McDonalds: they are a global brand, they have more money, they are going to reduce the number of cafes and restaurants. Lets keep them out. Would that have been a mistake? Does everyone buy from Mc Donalds? Imagined we reasoned like that in 1950. Lets keep supermarkets out of cities in South Africa. Lets persist to buy directly from the farmers and small cafes and shops that existed then. I can assure you: we would not have the distribution chain we have today: so many super markets and better products. We would not have the range of products. And as far as I can see: more supermarkets have meant MORE jobs and not LESS. More speed and not less. More convenience and better products. How many jobs and small businesses have been created because of these supermarkets? The more supermarkets, the more jobs. Sure the Greek and Portuguese cafes that were prominent back then - many have died out. But I do see many that still exist, despite the big shopping centres in our cities. Some exist right next door to these shopping centres - some are open on Sundays, public holidays, late at night. People learn to adapt. It is a big continent. There is 800 million consumers. It will soon be 2 billion in 2050 in Africa. There's enough opportunity for 10 walmarts, Checkers, Pick n Pays,hundreds and millions of restaurants and small businesses. Visit Paris some time. A million restaurants each making a killing. 5 out of every 7 people walking the streets are tourists. Imagine competition was restricted in Paris. There would never have been so much money concentrated in such a small city. The wealthiest real estate is Champs Elysees. The rent is US$77000 per square m. That's what happens if you don't restrict competition.

Nasdaq7
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2011-01-24 18:32

Furthermore, in Africa, there are 800m+ poor people. If they can get access to cheap products, just think how it will enhance their lives. Africa is a natural resource rich continent. Imagine someone that usually couldn't afford a computer can now suddenly buy a computer through Walmart. That person could become a programmer. How much time could Africans save by having access to cheap products: cheap vacuum cleaners, dishwashers, cellphones, printers, televisions, radios, microwaves, pens, pencils, paper, food ... how much can their productivity increase? Do you see the possibilities of Walmart in Africa? Their natural resources can pay for these cheap products. They can become far more productive people. Denying these people these cheap but high quality products - and they will never reach that same level of production and education and economic output. I cannot see why the unions cannot realise this? Take away all these cheap goods from poor African people and what do they have?

Dale Norris
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2011-01-24 22:23

Bring it on Walmart.I have used the same three supermarket chains for the past 10 years.In those years, I know the faces of a lot of the staff and checkouts. Guess what, these supermarkets, havent yet mastered the art, of getting the people to be welcoming,interested, and knowledgable about their jobs. In brief, they dont seem to have been able to get the staff, beyond the word ''bag''. So lets see if a world class supermarket challenge, can give South African Supermarkets the kick in the pants, that it needs.